On Tuesday, Jefferies adjusted its outlook on Varex Imaging (NASDAQ:VREX), lowering the price target to $17 from $18 while maintaining a Hold rating on the stock. The firm met with senior management from Varex, including CFO Sam Maheshwari and Director of Investor Relations Chris Belfiore.
The discussions revealed that despite current challenging trends, the company anticipates an improvement in fundamentals. This expected turnaround is based on the belief that the market is nearing the lowest point of demand, with positive changes projected once issues such as customer destocking and regulatory challenges in China begin to resolve within the next one to two quarters.
The update provided by Jefferies included insights into various aspects of Varex Imaging's business. The company's recent updates on Photoconductive Detectors (PCD), its Industrial segment, profit margins, and balance sheet were described as being consistent or constructive. These insights reflect the company's current status and the expected trajectory as perceived by the management team.
Varex Imaging, a provider of medical X-ray tubes and image processing solutions, has been navigating through a period marked by external pressures. The company's performance has been influenced by broader market conditions, including the impact of anti-corruption measures in one of its key markets, China. This has led to a temporary decrease in demand, which the company expects to recover from in the near future.
The revised price target from Jefferies represents a modest adjustment in the investment firm's expectations for Varex Imaging's stock performance. The Hold rating indicates that Jefferies advises investors to maintain their current position in the stock without advocating for additional investment or divestment at this time.
Varex Imaging's management remains focused on navigating through the present challenges and capitalizing on potential market improvements. The company's leadership has expressed confidence that the current headwinds are temporary and that Varex Imaging is well-positioned to benefit from an anticipated upswing in demand.
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